As treaties and trade agreements are implemented this year, more U.S. companies are looking at the Association of Southeast Asian Nations for fresh business opportunities. Fortunately, a whole host of logistics and transportation service providers are laying the groundwork to overcome inherent infrastructure challenges.

Today, U.S. trucking companies face more regulations than any time in history—and they claim this “regulatory tsunami” is putting the clamp on U.S. productivity. During this session shippers will gain a better understanding of the current state of trucking regulations (HOS & CSA) and the impact they're having on capacity and rates.

On the heels on a 2.7 percent gain in March, following a cumulative 2.8 percent decline in January and February, the April edition of the Ceridian-UCLA Pulse of Commerce Index (PCI) was down 0.5 percent.

The PCI has been down on a sequential basis in six of the last nine months, but it was up 3.5 percent compared to April 2010 and has been up annually for 17 consecutive months.

The PCI, according to Ceridian and UCLA, is based on an analysis of real-time diesel fuel consumption data from over-the-road trucking and is tracked by Ceridian, a provider of electronic and stored value card payment services. The PCI data is accumulated by analyzing Ceridian’s electronic card payment data that captures the location and volume of diesel fuel being purchased by trucking companies. It is based on real-time diesel fuel purchases using a Ceridian card by over the road truckers at more than 7,000 locations across the United States.

The PCI also closely tracks the Federal Reserve’s Industrial Production data as well as GDP growth. In March, it correctly predicted Industrial Production would see a 0.8 percent gain in April. And it is calling for a 0.25 percent uptick in May.

“Though down in April, the decline offset only a fraction of the exceptional 2.7 percent gain posted in March, which was sufficient to drive continued growth in the three month moving average of the PCI,” said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast, in a statement. “However, the disappointing 1.8 percent growth of real GDP in the first quarter remained consistent with the pattern of modest, fitful economic growth reflected by the PCI since the first quarter of 2010. The most recent report reinforces our long held cautious, below consensus outlook for growth in GDP and employment.”

With the GDP growing at an underwhelming rate in the first quarter, the PCI is calling for further GDP growth at a modest rate in the 2-to-3 percent range, as opposed to the 5-to-6 percent range, which the report’s authors maintain is vital to drive significant reductions in unemployment.

And with the PCI relatively flat from March to April, gas prices continued to steadily increase, while retail sales showed slow growth and freight volumes saw some moderation over the same period.

“What we are seeing with these April numbers is a bit of a ‘Groundhog Day’ effect,” said Todd Dooley, Ceridian senior vice president of finance, in an interview. “It has been the same theme of slow and steady growth over the past five-to-seven months, which shows economic recovery that is not spectacular.”

The rate of growth occurring in the PCI on an annual basis equates to the 2-to-3 percent GDP growth rate the report is calling for, said Dooley, which includes stagnant employment levels and is likely to persist for the foreseeable future.

When looking at how the PCI compares to what is happening in the freight-related economy, Dooley explained that excluding the impact of fuel prices, demand for factory-produced goods being shipped are pointing towards growth in consumption as evidenced in the PCI’s annual growth rate.

“I would expect demand to remain relatively consistent and grow slightly,” said Dooley. “The bigger concern, though, becomes the impact of fuel prices and how it impacts goods producers and consumers. In a consumer-driven economy, as retail goes, so goes business for trucking companies to a large extent.”

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!

Get timely insider information that you can use to better manage yourentire logistics operation.

Recent Entries

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in January dropped 1.2 percent to $89.3 billion.

In today's supply chain, the only constant is change.
Our white paper 'Change Your Perspective: Four Keys to Effectively Adapting to Rapid Change in the Distribution Center Environment' provides key insights on not only adapting to trends, but which trends will enable you to achieve running the warehouse of the future.